Management confirmed that UniMy’s enrolment fell below expectations. On the flip side, the company indicated that it is finalising a sizeable oil &  gas  (O&G)-related  training  contract  with  one  of  Malaysia’s largest O&G players. Maintain BUY, with FV upgraded to MYR2.70, based on a higher FY14F P/E of 12.0x, as a slew of contract flows over the next few months will catalyse a re-rating of its shares.   

   Softer  numbers  for  UniMy.  Prestariang  (PRES)  has  confirmed  that  its University  Malaysia  Of  Computer  Science  And  Engineering  (UniMy) campus  has  enlisted  18  students  for  its  July  intake,  way  below expectations.  To  help  address  the  shortfall,  Management  will  launch  an intake  for  its  foundation  courses  in  August,  followed  by  another  for  its degree  courses  in  September.  The  group  is  currently  targeting  a  total intake  of  200  (300  previously)  and  600  (formerly  1,200)  students  for FY13 and FY14 respectively. We expect the momentum to gradually pick up,  as  PRES  is  ramping  up  its  marketing  campaign  to  increase  brand awareness among potential students.    

 
  More  O&G-related  contracts.  Along  with developing  an  acknowledged O&G-centric  ICT  training  and  certification  programme,  Management  indicated  that  PRES  is  working  with  software  multinational  Autodesk  to secure  a  major  training  contract  with  one  of  Malaysia’s  biggest  O&G players.  We  understand  the  contract  value  will  be  around  MYR15m-MYR20m and will be finalised over the next few weeks.  

  Potential  M&As  in  O&G  sector?  PRES  is  currently  exploring  M&A opportunities  within  the  O&G  training  space,  as  Management  has identified  the  need  by  O&G  firms  to  provide  practical  skills  training  to young  recruits  in  areas  like  welding,  scaffolding  and  fabrication.  We expect  the  details  to  be  firmed  up  over  the  coming  months,  with  a potential M&A inked by 4QFY13.  

  Maintain  BUY. We  continue  to  see  positive  prospects  for  PRES,  given more O&G industry-related contracts coming on board and the potential acquisition  of  an  O&G-related  training  company.  Thus,  we  maintain  our BUY call and nudge up our FV to MYR2.70 (from MYR2.36 previously), based on a higher 12.0x P/E (from 10.0x previously).

Source: RHB